XRP Ledger Validators Weigh in on Lending Protocol Changes

The XRP Ledger is undergoing changes to its lending structure, with validators considering a new framework that would allow depositors to control how their capital enters lending markets. XRPL validator Vet has urged validators to review the latest Lending Protocol changes, which are necessary for activating lending on mainnet.

The Lending Protocol changes introduce closed-ended vaults, which operate through three phases: subscription, investment, and redemption. During the subscription phase, the vault remains open for deposits, and users can provide assets to the vault and receive shares in return. The vault then enters the investment phase, closes to new deposits, and deploys capital into loans.

The redemption phase follows the investment period, and once the vault reaches its redemption date, it reopens for withdrawals. Depositors can then redeem their shares based on the final value of the vault.

Vet also advised validators to consider LendingProtocol v1 and v1.1 together when voting on the lending framework. Three amendments must activate for lending to go live on XRPL mainnet: LendingProtocolV1_1, LendingProtocol, and SingleAssetVault.